Why Amazon Wants Your Old CDs

By Kelli B. Grant

Consumers may now have a new home for all those CDs currently collecting dust or serving as drink coasters – Amazon.

The online retailer announced Wednesday that has added CDs to the list of items it allows shoppers to trade, which includes books, video games, DVDs and electronics. Sellers get a free shipping label to mail in their items, and receive store credit based on quality of the discs. Just how much credit customers can expect to get remains unclear; at press time, Amazon’s trade-in page had not yet been updated to allow CD entries. (Amazon.com did not respond to requests for comment.) But retail experts say CDs could fetch as much as $2 to $3 apiece. “If I still owned any CDs, I’d turn them in,” says Dan Rayburn, a principal analyst for Frost & Sullivan. “Really, who else wants old CDs?”

It’s unlikely Amazon does either, say experts. “There’s just not that big a market for used CDs,” says Randy Allen, an associate dean at Cornell University’s Johnson Graduate School of Management. Instead, Allen and other experts say Amazon is hoping the service will eventually translate to more purchases — and more loyal customers. Studies have shown that when consumers redeem gift cards or credit, they tend to spend 40% more than the value of that credit.

Experts say it also sets up Amazon as a go-to vendor for that dwindling market of CD buyers, who could soon see more selection and lower prices for used discs on the site.

To get the best deal, consumers can copy songs from the discs to their computer for free before selling, Rayburn says. A low sale price is still the equivalent of a free MP3 or two. Although Amazon.com is the only big name buying back CDs right now, experts say it’s also worth comparing prices on trade-in sites such as Buy Back Media, SecondSpin.com and Ultimate Buy Back.

Consumers may find, however, that much of their music isn’t eligible. Most CD trade-in sites — as well as Amazon’s DVD trade-ins — require the seller to include the case with its artwork and UPC code. Scratched discs may also be rejected. So music fans who ditched jewel cases in favor of a “CD wallet” or didn’t keep their collection in pristine condition are likely stuck with it until their next yard sale.